1. Field of the Invention
The present invention is directed to the hedge fund industry. More particularly, the invention is directed to a method and associated apparatus that may allow direct interaction and information flow between hedge funds (or types of investment vehicles or entities) and investors in those funds (or types of investment vehicles or entities). The method may use dual search engines, one of which may permit a hedge fund to review a database of qualified investors and identify investors that match certain criteria. The other search engine may enable a qualified investor to review a database of hedge funds and identify a hedge fund that matches the investor's criteria. Therefore, the method may permit hedge fund agents direct access to investors and may also permit qualified investors to gain access to detailed hedge fund information and agents.
2. Reference to Related Art
A hedge fund is a form of investment vehicle that may be used by certain individuals and institutions to engage in aggressive and/or speculative investment activity not open to ordinary mutual funds. Indeed, the offering memorandum of many hedge funds allows those funds to use a combination of sophisticated investment strategies, such as taking both long and short positions, using leverage and derivatives, and investing in many markets, in an effort to secure a higher return on investment. However, in return for the ability to adopt these aggressive investment positions, hedge funds are made subject to significant oversight and regulation. For example, hedge funds are not permitted to advertise and hedge fund investors must meet certain legal requirements. These investors must also be able to establish certain financial criteria and are presumed to be sufficiently knowledgeable to understand the risks related to hedge fund investing. Many hedge funds also have extremely high minimum investment amounts ranging from $250,000 to well over $1 million and the managers of hedge funds may charge significant fees and commissions for their services.
Investor participation in hedge funds appears to be growing, however, the rate of such growth could be increased. One factor that may be holding back growth in the hedge fund market may be current market conditions, wherein there exists a wide variety of available funds, but a relatively small group of available qualified investors. Stated differently, the market presently features an array of different hedge funds from which an investor may choose. However, the high minimum dollar amounts required to invest in hedge funds will generally mean that the pool of qualified investors available to participate in any given hedge fund is relatively small. Accordingly, to simulate growth in hedge fund investing, means need to be developed whereby this finite group of investors can be matched with appropriate hedge fund opportunities.
Past methods of connecting eligible investors with funds of interest to those investors may be unfruitful and are typically very expensive. These prior methods included the hedge funds retaining third-party marketing firms to find qualified investors. Indeed, hiring such a firm may be critical to a funds' success since, as mentioned above, hedge funds are not permitted to advertise. However, these third-party firms are extremely expensive, with some charging up to 20% in perpetuity of all fee on money raised by the firm. Therefore, it would be desirable to provide a method to match hedge funds and hedge fund investors that is controlled, discrete and allows for an easy exchange of ideas and information in a confidential and secure environment at a low cost.
Concerning potentially related art, Published U.S. Patent Application Nos. 2002/0087506, 2002/0087446, 2002/0087450 and 2003/0101115 are directed to methods for matching inventors with entrepreneurs. Further, U.S. Pat. No. 7,013,291 is directed to a “Financial Instrument Filtering System and Method Therefor” and describes a method wherein a user first selects certain filter criteria including an “investment parameter”. This filter criterion is then matched against a database of financial instruments. Once matched, the user receives a “histogram” based on the output data.